Apple Is The Disney World Of Tech

On Twitter, Ben Bajarin, and others, recently argued that the value in tech tends to inevitably shift from software to hardware and, finally, to services.

Hardware to software to services. Apple is in a unique position to capture content. ~ Ben Bajarin (@BenBajarin)

Ben, you’re essentially saying Apple is beginning a new business model around iOS. ~ eric perlberg (@eric_perlberg)

I’m not so sure.

24_44I think Apple’s business model is similar to the Disney World business model. There are boardwalks and amusement fairs aplenty, but there is only one Disney World. It it the crème de la crème of amusement parks. Similarly, there are smartphones and tablets aplenty but there is only one “Apple World.” It is the crème de la crème of mobile computing.

Disney World does not charge per ride. Rather, they charge a single admission fee to allow admission to their parks. Similarly, Apple does not charge for its platform. The iPod Touch, iPhone or iPad is the price of admission to their ecosystem — the “ticket” to “Apple World.”

Hardware As A Ticket

Pundits often ignore the value of Apple’s ecosystem. They compare Apple’s hardware to the hardware of Apple’s competitor’s and, finding it wanting, proclaim it to be “overpriced”. But if one includes the Apple ecosystem in the cost of the hardware, then the premium charged by Apple for their hardware is more than justified.

Without a doubt, Disney World generates huge amounts of money from the sale of foods, concessions and hotels, but it is the Disney Park that draws the customers. Similarly, Apple makes huge amounts of money from the sale of apps, music, TV and movies but it is Apple’s entire ecosystem — not just their content — that draws the customers.

Strategy Bonus

Microsoft sells its software licenses to Original Equipment Manufacturers (OEMs). They, not the consumer, are Microsoft’s true customers. Google gives away its services and sells consumer eyeballs to advertisers. The advertisers, not the consumers, are Google’s true customers. Apple, on the other hand, sells their hardware — their “ticket” to their ecosystem — directly to the end user.

Microsoft, Google and Apple all want the end user to have a superior user experience. But since Apple sells their hardware directly to consumers, it is easier for them to stay focused on that task. With Apple, the customer and the end user are one and the same. Apple’s desire to help its customers is perfectly aligned with Apple’s desire to help its end users. One might call this a Strategy Bonus. Microsoft and Google, try as they might to please the end user, have a customer layer between themselves and that end user. Apple does not.

Different, Not Best

Am I saying Apple’s business model is superior? Not at all. Throughout my life, I’ve enjoyed going to my local boardwalk and I would be unable to do that if the Disney World model were the only amusement business model available. On the other hand, it took a unique man with a unique vision to create a unique place like Disney World. It’s a one of a kind, world class, amusement experience. And the world would be a lesser place without it.

Similarly, it took a unique man with a unique vision to create “Apple World”. I’m glad the world has Microsoft and Google. But the world would be a lesser place without the unique vision that created Apple. It’s the Disney World of tech.

Published by

John Kirk

John R. Kirk is a recovering attorney. He has also worked as a financial advisor and a business coach. His love affair with computing started with his purchase of the original Mac in 1985. His primary interest is the field of personal computing (which includes phones, tablets, notebooks and desktops) and his primary focus is on long-term business strategies: What makes a company unique; How do those unique qualities aid or inhibit the success of the company; and why don’t (or can’t) other companies adopt the successful attributes of their competitors?

10 thoughts on “Apple Is The Disney World Of Tech”

  1. weak argument

    there is a big difference between the Physical world (tangible) or Disney land park hotel etc than the technology world of computer service and the cloud that some Apple fan as you wont accept until it is too late.

  2. John, Good article but I do have to take issue with this statement:

    “Microsoft, Google and Apple all want the end user to have a superior user experience”

    Not true at all! Only Apple wants end users to have a superior user experience. The others may say that they do but actions speak louder than words. Microsoft wants to sell more licenses to OEMs and IT departments so their focus is on making them happy and not the end user. This does not lead to a superior user experience. As for Google, again, they want to sell end users to advertisers so for them, the people they want to keep happy is the advertiser community. This is why you end up with the fragmented security nightmare mess that is Android and is why it is not going to be fixed at any time in the future.

  3. When a 27” iMac only has an i5 in it, IMO, it’s a problem @ $2000. At $1200-$1400, it isn’t.
    When it can’t be upgraded (except for RAM) it’s a problem. When Apple RAM prices are routinely 4x more it’s a problem.
    “Experience” matters. Specs matter too. Tolerating these things is giving them a “bye”.

    1. You’re a self-parody. You’re all about the specs. But it’s value that matters. Apple doesn’t sell software, it doesn’t sell software, it doesn’t sell specs. It sells an experience, just like Disney. Go and look at the rides at Disney World. They are, in no way the latest or the greatest. But the Disney World experience – as a whole – simply can’t be beat.

      Keep arguing that superior specs are what mattes — a nd keep being frustrated when superior value and experience win out with consumer every time.

      1. Ha! I think your fan blades are clouding what it is I said. Specs are ALSO important.
        How would including an i7 instead of an i5, at that price, have negatively impacted the “experience”? Less expensive machines would have had it, and then I could attribute the price difference to the “experience”.

        I’m not a gambler, but if I were, I wouldn’t go to the casino and root for the dealer.

          1. In the “Apple vs. the world” dialogues, Mr. Kirk deserves respect. I believe making a reference to “fan” instead of “wool” does that. Just a more respectful parody. 😉

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